Playing with the numbers: School board accused of arbitrarily deflating cost estimates

Bond numbers

Haywood County voters approved a $25 million school bond in May 2005 intended to pay for a host of projects. The list of cost estimates presented to the public is as follows:

• $15 million: new Bethel elementary school

• $1.1 million: air conditioning and new windows for Waynesville and Canton Middle schools

• $873,000: repairs for flood damage to Central Haywood High and the Canton Middle school band building not covered by FEMA or the state

• $1.55 million: expansion at North Canton Elementary

• $1.39 million: expansion at Clyde Elementary

• $975,000: expansion at Riverbend Elementary

• $1.76 million: new gym for Pisgah High

• $1.9 million: new gym for Tuscola High

• $273,000: baseball and softball fields for Pisgah High and Canton Middle to replace fields wiped out by the flood

Haywood County School Board members deflated construction cost estimates provided by architects in order to get a $25 million school bond approved by county commissioners and on the ballot for a vote last year.

At least one school board candidate and two former school employees say the move was intended to mislead voters who overwhelmingly approved the bond.

Documents support the claim. They show school officials, under the direction of the school board, revised the architects’ construction estimates to reduce the price tag on the bond. Actual costs are higher, however, and now the bond is $2 million in the hole. As a result, the school system will likely run out of bond money before it completes all the projects listed in the bond.

Critics claim the school board knew full well that the $25 million in the bond would not cover the costs of all the projects, but were unwilling to make substantial cuts to the list. Each project brought its own voting block to the table, and each was needed to get the bond passed.

The controversy has cropped up as a campaign issue in the run up to elections for school board this fall. School board members seeking re-election say they did not mislead voters about the construction costs in the bond. They say construction costs simply came in higher than they expected.

School records and interviews with former school officials indicate otherwise, however.

The bond projects were initially estimated at $28.5 million based on construction costs provided by Padgett and Freeman Architects in the fall of 2004. The Haywood County Board of Commissioners — who must OK any bond referendum put before voters — told school officials to get the bond down to $25 million.

John McCracken, the former assistant superintendent, presented the dilemma to school board members on the building and grounds committee.

“I told them we had to reduce the cost below $25 million, and we needed to decide which projects would have to be taken out to reduce the costs,” McCracken said.

Out of all the projects, new gyms at Pisgah and Tuscola high schools and baseball fields in Canton were the board’s lowest priority. But school board members were unwilling to nix the athletic facilities from the list.

“It would eliminate a tremendous number of votes for the bond and it wouldn’t pass,” McCracken said of their rationale. “I was told they didn’t want to cut out any projects.”

Since retiring as superintendent more than a year ago, McCracken has been at odds with the new school administration. Conflict escalated when the school system called for a criminal investigation against McCracken, although the investigation had no merit and was dismissed.

McCracken said suggested reducing the scope of Bethel Elementary School. For example, instead of building both a gym and an auditorium, they could follow in the footsteps of the other elementary schools and combine the two. Instead of a two-story building, they could make it one story. Instead of the rockwork entrance, they could make it simple, McCracken said.

School board members chose not to make those reductions, however. Instead, they altered the construction estimates from the architect from $122 a square foot to $112 a square foot. That reduced the cost of Bethel Elementary by $1 million — on paper at least. The reduction was cosmetic because the project never got smaller in size or scope.

They made other cuts on paper as well. They whacked construction estimates for the gyms, slashed the price tag for furniture at the new Bethel elementary school and low-balled the estimated costs of everything from bleachers to air conditioning.

The school board did make some legitimate cuts, as well. They scaled back expansions at North Canton Elementary and Riverbend Elementary by $950,000. They scaled back the baseball and softball fields at Canton Middle and Pisgah High by $750,000 by leasing land instead of buying it.

When school officials returned to the county commissioners — this time with a list of bond projects totaling only $24.8 million — they had made some tangible cuts. But the bulk of reductions were from arbitrarily slashing the cost estimates so the projects would appear to come in under $25 million, according to McCracken. A review of the original cost estimates provided by the school system based on the architects’ estimates compared to a revised version presented to commissioners verifies the scenario.

Mark Swanger, chairman of the Haywood County commissioners, said commissioners were not aware of the situation.

“I had no reason to believe there was not a legitimate reduction in size and scope of the projects,” Swanger said.

Some school board candidates are questioning the board’s handling of the bond.

“We know at this point they are not going to have enough money to do all the projects,” said D.B. Arrington, a school board candidate. “I want them to do as many as they can in the order they are listed in priority and not skip around and do something here and something there.”

School board candidate Keith Wyatt, a long-time principal in Haywood County, said the school system could have saved money by combining the gym and auditorium at the new Bethel Elementary.

“I find it most unusual to build an auditorium for an elementary school when we haven’t done that for any other elementary school in the county,” Wyatt said. The five elementary schools built in recent years — Clyde, Hazelwood, Riverbend, Jonathan Valley and Meadowbrook — have combined gyms and auditoriums.

“The construction of large areas with big roof spans get to be fairly expensive,” Wyatt said.

School board rebuttal

Four of the nine school board seats are up for election this fall. All four are running for re-election: Johnny Woody, Jimmy Rogers, Bruce Sutton and Stevie Kirkpatrick.

All four said they are committed to completing all the projects on the bond list.

“It is a little early to speculate that there will definitely not be enough,” said Sutton. Sutton attributed any shortages to an unexpected increase in construction costs. He cited an increase in building supplies and fuel costs, which in turn drove up building costs.

“That is something we couldn’t control. We made plans for legitimate costs on our school buildings and projects,” Sutton said.

Sutton said they did their best to anticipate a reasonable increase in building costs, but costs went up more than they expected. Sutton said the school board made a genuine effort to reduce the cost of bond projects below the $25 million price tag.

“We chopped a lot of stuff off the list,” Sutton said. “There were items taken off.”

Johnny Woody also attributed any deficits in the bond projects to an unexpected increase in construction costs.

“The money for the construction costs as of today, some of them are two and a half years old. You’ve had an increase in labor and costs,” Woody said.

Woody also said the board tried to make legitimate cuts.

“I can remember us having to crunch a lot of numbers to squeeze in our projects. I remember us having to throw out some needs,” Woody said. “We are going to go as far down that list as possible and hopefully we can get to the last one and get it completed.”

Jimmy Rogers also said they were caught off guard by rising construction costs.

“When you set up a bond, it is set up on today’s pricing. Those costs will change,” Rogers said. “I feel like we did as close as an accurate cost estimate as you can.”

Rogers said there may not be enough money to do all the projects on the list, but it will be close.

Stevie Kirkpatrick said there would be no problems completing the bond projects.

“As of right now, the bond is on target to do everything we had on the list,” Kirkpatrick said. “Bethel Elementary School is on target. To my knowledge it is on target and we have not overspent. We are not over budget on the Bethel school.”

If there is not enough money in the bond to do the projects, the school board hopes to make up the difference from other pots of money. For example, the state lottery is expected to generate money for the school system and could be put towards the uncompleted bond projects. The school system could also use money it gets from the county each year to cover the difference.

Day of reckoning

When the school system put the construction of Bethel Elementary out to bid last year, the bids that came in exceeded what had been allotted in the bond by about $2 million.

Nearly $1 million of that was due to tinkering with the architects’ projected costs. Part was also due to the omission of $600,000 in architect design fees in the bond estimates. And part was due to unexpected increases in construction costs.

The building and grounds committee — composed of Johnny Woody, Mike Sorrels, Walt Leatherwood and Bruce Sutton — discussed the situation at a meeting on Sept. 16, 2005.

At that meeting, Woody said he always expected they would have to make cuts down the road.

“On this bond referendum, no one ever said we guarantee all these projects will be fulfilled,” Woody said at the meeting, which was captured on audio tape. “No one ever said this. We said we have a priority list and we will go down the list as far as we can go.”

Woody was optimistic, however.

“You know, I’m ready to accept that bid as it is and work with the contractor as we go and have the intent to fulfill all this as we go down,” Woody said. “We are going to do the best for each community as we go through.”

Sutton questioned whether they should scale back on Bethel Elementary School. He said money could be saved by combining the gym and auditorium, as they did at other elementary schools.

“I’m not saying it has to be done here, but we can’t afford but so much. With your own personal finances, sometimes there’s things you want but you can’t have because the money’s not there. If we over do $2 or $3 million on this school, then some of this right here is going to get gone to the wind,” Sutton said of the list.

Sutton questioned how that would sit with communities around the county. “They came out in good faith and voted for this bond. Not just Bethel voted the bond. Everybody in this county, from end to end, side to side, voted on this bond to try to accomplish these things,” Sutton said.

Walt Leatherwood suggested they look for cuts as they move forward in order to accomplish the things on the list.

“If we keep on top of it I believe we can do the biggest part of these. We can make it, can’t we Jim, if we watch what we do?” Leatherwood asked architect Jim Padgett who was at the meeting.

Padgett replied that construction costs had escalated significantly in recent months. He called it a “nightmarish type atmosphere.”

Sutton questioned how the county commissioners would feel about the bids coming in over budget. The school system was supposed to report to commissioners on the status of bids the following Monday.

“Maybe what we need to do Monday is be very vague about where we’re going to reduce this thing,” said school board member Mike Sorrells.

“The less they know the better off we are,” Woody added.

When School Board Chairman Chuck Francis appeared before the commissioners a few days later, he “expressed the pleasure of the board of education that the bids came in just over the architect’s estimate,” according to minutes of the meeting.

In reality, however, the school system was in for about $2 million more than they had allotted for the project in the bond.

Ted Norman, the long-time school maintenance director, said the public was led to believe all the projects on the list would be completed with the bond money.

“That’s how the bond was sold,” Norman said. “If you weren’t going to do it, why have it listed? It was put in there to sell the bond.”

Norman was forced to resign under pressure last year and was the subject of the same investigation as McCracken, but was cleared of the accusations by law enforcement.

Norman said tinkering with the architects’ projected costs isn’t the way to cut costs.

“I would have been more comfortable staying with the architect and making building cuts in square footage,” Norman said.